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Mid- and Late-Career Teachers Struggle With Paltry Incomes

July 28, 2014 Comments off

Mid- and Late-Career Teachers Struggle With Paltry Incomes
Source: Center for American Progress

Low teacher pay is not news. Over the years, all sorts of observers have argued that skimpy teacher salaries keep highly qualified individuals out of the profession. One recent study found that a major difference between the education system in the United States and those in other nations with high-performing students is that the United States offers much lower pay to educators.

But for the most part, the conversation around teacher pay has examined entry-level teachers. The goal of this issue brief was to learn more about the salaries of mid- and late-career teachers and see if wages were high enough to attract and keep the nation’s most talented individuals. This research relied on a variety of databases, the results of which are deeply troubling. Our findings include:

  • Mid- and late-career teacher base salaries are painfully low in many states. In Colorado, teachers with a graduate degree and 10 years of experience make less than a trucker in the state. In Oklahoma, teachers with 15 years of experience and a master’s degree make less than sheet metal workers. And teachers in Georgia with 10 years of experience and a graduate degree make less than a flight attendant in the state. (See Appendix for state-by-state data on teacher salaries. We relied on “base teacher” salaries for our data, which typically does not include summer jobs or other forms of additional income.)
  • Teachers with 10 years of experience who are family breadwinners often qualify for a number of federally funded benefit programs designed for families needing financial support. We found that mid-career teachers who head families of four or more in multiple states such as Arizona and North Dakota qualify for several benefit programs, including the Children’s Health Insurance Program and the School Breakfast and Lunch Program. What’s more, teachers have fewer opportunities to grow their salaries compared to other professions.
  • To supplement their minimal salaries, large percentages of teachers work second jobs. We found that in 11 states, more than 20 percent of teachers rely on the financial support of a second job, and in some states such Maine, that number is as high as 25 percent. In these 11 states, the average base salary for a teacher with 10 years of experience and a bachelor’s degree is merely $39,673—less than a carpenter’s national average salary. (Note that teachers typically have summers off, and the data on teachers who work second jobs do not include any income that a teacher may have earned over the summer.)
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Twenty-Three Years and Still Waiting for Change — Why It’s Time to Give Tipped Workers the Regular Minimum Wage

July 15, 2014 Comments off

Twenty-Three Years and Still Waiting for Change — Why It’s Time to Give Tipped Workers the Regular Minimum Wage
Source: Economic Policy Institute

Last year marked the 75th anniversary of the Fair Labor Standards Act (FLSA), the legislation that established many of the basic labor protections workers enjoy today, such as a 40-hour workweek, overtime protection, and a national minimum wage. There have been periodic amendments to the FLSA over the years, but the 1966 amendments were especially significant. They extended protections to hotel, restaurant, and other service workers who had previously been excluded from the FLSA, but also introduced a new “subminimum wage” for workers who customarily and regularly receive tips. Unlike temporary subminimum wages (such as those for students, youths, and workers in training), the “tip credit” provision afforded to employers uniquely established a permanent sub-wage for tipped workers, under the assumption that these workers’ tips, when added to the sub-wage, would ensure that these workers’ hourly earnings were at least equal to the regular minimum wage. The creation of the tip credit—the difference, paid for by customers’ tips, between the regular minimum wage and the sub-wage for tipped workers—fundamentally changed the practice of tipping. Whereas tips had once been simply a token of gratitude from the served to the server, they became, at least in part, a subsidy from consumers to the employers of tipped workers. In other words, part of the employer wage bill is now paid by customers via their tips.

Today, this two-tiered wage system continues to exist, yet the subsidy to employers provided by customers in restaurants, salons, casinos, and other businesses that employ tipped workers is larger than it has ever been. At the federal level, it currently stands at $5.12 per hour, as employers are required to pay their tipped staff a “tipped minimum wage” of only $2.13 per hour, and the federal regular minimum wage is currently $7.252 Remarkably, the federal tipped minimum wage has been stuck at $2.13 since 1991—a 23-year stretch, over which time inflation has lowered the purchasing power of the federal tipped minimum wage to its lowest point ever.

Proposed federal minimum-wage legislation, the Fair Minimum Wage Act of 2014—also known as the Harkin–Miller bill—would not only increase the federal regular minimum wage to $10.10, but for the first time in decades would also reconnect the subminimum wage for tipped workers back to the regular minimum wage by requiring the former be equal to 70 percent of the latter. This would be a strong step in the right direction; however, we present evidence that tipped workers would be better off still if we simply eliminated the tipped minimum wage, and paid these workers the full regular minimum wage.

UK Wages Over the Past Four Decades, 2014

July 15, 2014 Comments off

UK Wages Over the Past Four Decades, 2014
Source: Office for National Statistics

This report looks at changes in earnings in the UK over the past forty years. It makes use of distributional and cohort analysis to assess the impact of the recession on real earnings as well as looking at the impact of the introduction of the national minimum wage.

CBO — Answers to Questions From Senator Hatch About Various Options for Payroll Taxes and Social Security

July 14, 2014 Comments off

Answers to Questions From Senator Hatch About Various Options for Payroll Taxes and Social Security
Source: Congressional Budget Office

Senator Orrin Hatch asked CBO several questions about the implications of altering the Social Security payroll tax rates as well as the taxable maximum (the maximum amount of earnings on which those payroll taxes are imposed). This document provides CBO’s answers to those questions.

For the various options discussed, CBO presents the changes that would result in the annual payroll taxes paid by employees and employers, and for people born at various times and with various levels of earnings, the change in their median lifetime payroll taxes and median initial replacement rates (benefits as a percentage of career-average earnings).

CBO based its answers on projections issued last September in The 2013 Long-Term Budget Outlook. In that report, the 75-year projection period for Social Security spans 2013 to 2087. All changes to payroll tax rates and the taxable maximum analyzed for this report would begin in January 2015.

Performance for Pay? The Relation Between CEO Incentive Compensation and Future Stock Price Performance

July 9, 2014 Comments off

Performance for Pay? The Relation Between CEO Incentive Compensation and Future Stock Price Performance
Source: Social Science Research Network

We find evidence that CEO pay is negatively related to future stock returns for periods up to three years after sorting on pay. For example, firms that pay their CEOs in the top ten percent of excess pay earn negative abnormal returns over the next three years of approximately -8%. The effect is stronger for CEOs who receive higher incentive pay relative to their peers. Our results appear to be driven by high-pay induced CEO overconfidence that leads to shareholder wealth losses from activities such as overinvestment and value-destroying mergers and acquisitions.

How frequently do private businesses pay workers?

July 9, 2014 Comments off

How frequently do private businesses pay workers?
Source: Bureau of Labor Statistics

Payday is a highly anticipated day for any worker no matter when it takes place. How frequently workers get paid and how many paydays there are per year could affect their decisions as consumers, such as if and when they decide to purchase particular goods and services. If so, then the length of the workers’ pay period may have an impact on the velocity of money—that is, the number of times $1 is spent to purchase goods and services. Also, how frequently a worker is paid could play into his or her borrowing and saving choices.

From the employer perspective, the length of a business’ pay period is associated with the business’ costs and cash flows. Processing payroll, mailing checks, and paying the banking fees charged for a direct deposit are all costs that may incline businesses to pay their workers less frequently. However, most states set a minimum limit on how frequently employees are paid.

This Beyond the Numbers article analyzes pay frequencies, or lengths of pay periods, that private businesses use in the United States, as collected by the Current Employment Statistics (CES) survey. Data of this nature are not published in any standard Bureau of Labor Statistics (BLS, the Bureau) source, but are available upon request. The article also explains why the CES program collects such data.

CRS — Salaries of Members of Congress: Recent Actions and Historical Tables (updated)

July 7, 2014 Comments off

Salaries of Members of Congress: Recent Actions and Historical Tables (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

Congress is required by Article I, Section 6, of the Constitution to determine its own pay. Prior to 1969, Congress did so by enacting specific legislation. From 1789 through 1968, Congress raised its pay 22 times using this procedure. Members were initially paid per diem. The first annual salaries, in 1815, were $1,500. Per diem pay was reinstituted in 1817. Congress returned to annual salaries, at a rate of $3,000, in 1855. Specific legislation may still be used to raise Member pay, as it was most recently in 1982, 1983, 1989, and 1991; but two other methods—including an automatic annual adjustment procedure and a commission process—are now also available.

CBO — Approaches to Reducing Federal Spending on Military Pay and Benefits (presentation)

July 1, 2014 Comments off

Approaches to Reducing Federal Spending on Military Pay and Benefits
Source: Congressional Budget Office

This presentation provides information published in
Long-Term Implications of the 2014 Future Years Defense Program (November 2013),www.cbo.gov/publication/44683;
Options for Reducing the Deficit: 2014 to 2023 (November 2013), www.cbo.gov/budget-options/2013/44687; and
Approaches to Reducing Federal Spending on Military Health Care (January 2014), www.cbo.gov/publication/44993.

Bursting the Bubble: The Challenges of Working and Living in the National Capital Region

June 25, 2014 Comments off

Bursting the Bubble: The Challenges of Working and Living in the National Capital Region (PDF)
Source: The Commonwealth Institute for Fiscal Analysis, The DC Fiscal Policy Institute, and The Maryland Center on Economic Policy

Living in the national capital region looks like it has its advantages. Employment levels are back to where they were before the recession. The unemployment rate is far lower than that of the country as a whole. Incomes are high, especially for highly educated workers. From outside this bubble, things look pretty good.

However, the bubble obscures a troubling story for many residents of the region.

Income inequality is growing. Employment levels for people without a college education are far lower than before the recession. Unemployment rates for several groups of workers, including those without a college degree, remain high. Black workers and young workers were particularly hard hit by the recession, even when compared to other area residents with similar education levels. The high cost of living in the region is pushing many families to spend more than they can afford on housing, while others trade more affordable housing for long and expensive commutes.

The region has many successes worth celebrating. But broadly shared prosperity is not one of them. The region’s policymakers need to address the challenges facing those who are struggling to keep their foothold in the economy. This includes ensuring all workers in the region have the skills and credentials needed by employers for current and future jobs, taking steps to make sure all working adults have enough income to support their families, and ensuring availability of affordable housing options with access to good jobs.

Hackers Wanted: An Examination of the Cybersecurity Labor Market

June 24, 2014 Comments off

Hackers Wanted: An Examination of the Cybersecurity Labor Market
Source: RAND Corporation

There is a general perception that there is a shortage of cybersecurity professionals within the United States, and a particular shortage of these professionals within the federal government, working on national security as well as intelligence. Shortages of this nature complicate securing the nation’s networks and may leave the United States ill-prepared to carry out conflict in cyberspace.

RAND examined the current status of the labor market for cybersecurity professionals — with an emphasis on their being employed to defend the United States. This effort was in three parts: first, a review of the literature; second, interviews with managers and educators of cybersecurity professionals, supplemented by reportage; and third, an examination of the economic literature about labor markets. RAND also disaggregated the broad definition of “cybersecurity professionals” to unearth skills differentiation as relevant to this study.

In general, we support the use of market forces (and preexisting government programs) to address the strong demand for cybersecurity professionals in the longer run. Increases in educational opportunities and compensation packages will draw more workers into the profession over time. Cybersecurity professionals take time to reach their potential; drastic steps taken today to increase their quantity and quality would not bear fruit for another five to ten years. By then, the current concern over cybersecurity could easily abate, driven by new technology and more secure architectures. Pushing too many people into the profession now could leave an overabundance of highly trained and narrowly skilled individuals who could better be serving national needs in other vocations.

Cashier or Consultant? Entry Lab or Market Conditions, Field of Study, and Career Success

June 24, 2014 Comments off

Cashier or Consultant? Entry Lab or Market Conditions, Field of Study, and Career Success (PDF)
Source: Yale University

We analyze lab or market outcomes of U.S. college graduates from the classes of 1976 to 2011, as a function of the economic conditions they graduated into. We categorize college majors by average economic outcomes and skill level of the major, predominantly the average earnings premium, and measure a range of lab or market outcomes over the first 13 years after college graduation. We have three main findings. First, poor labor market conditions disrupt early careers. For the average major, a large recession at time of graduation reduces earnings and wages by roughly 11% and 3% (respectively) in the first year, and reduces the probability of full-time employment by 0.095. Effects on earnings and full-time employment fade out over the first 7 years of a career, while the wage effects persist. There is a small positive effect on the probability of obtaining an advanced degree. Second, for the period as a whole, these effects are differential across college majors. High-earning majors are somewhat sheltered when graduating into a recession relative to the average major, experiencing significantly smaller disadvantages in most lab or market outcomes measured. As a result, the initial earnings and wage gaps across college majors widen by 33% and 8%, respectively, for those graduating into a large recession. Most of these effects fade out over the first 7 years, but impacts on wages and a measure of occupational match quality persist. Higher paying majors are also slightly less likely to obtain an advanced degree when graduating into a recession. Our third set of results focuses on a recent period that includes the Great Recession. Early impacts on earnings are double what we would have expected given past patterns and the size of the recession, in part because of a large increase in the cyclical sensitivity of demand for college graduates. The effects are also dispersed much more evenly across college majors than those of prior recessions.

Raising America’s Pay: Why It’s Our Central Economic Policy Challenge

June 24, 2014 Comments off

Raising America’s Pay: Why It’s Our Central Economic Policy Challenge
Source: Economic Policy Institute

Our country has suffered from rising income inequality and chronically slow growth in the living standards of low- and moderate-income Americans. This disappointing living-standards growth—which was in fact caused by rising income inequality—even preceded the Great Recession. Fortunately, income inequality and middle-class living standards are now squarely on the political agenda. But despite their increasing salience, these issues are too often discussed in abstract terms. This paper—and the Raising America’s Pay project that it launches—exposes the easy-to-understand root of rising income inequality, slow living-standards growth, and a host of other key economic challenges: the near stagnation of hourly wage growth for the vast majority of American workers over the past generation.

It should not be surprising that trends in hourly wage growth have profound consequences for American living standards. After all, the vast majority of Americans rely on their paychecks to make ends meet. For these families, wages and employer-provided benefits comprise the bulk of income, followed by other income sources linked to labor market performance, such as wage-based tax credits, pensions, and social insurance. Even for the bottom fifth of households, wage-related income accounts for the majority of total income. Indeed, wage-related income has been a growing share of total bottom-fifth income over time, as the safety net shifts toward wage-related income supports (such as the earned income tax credit) while non-wage-related supports (such as Temporary Assistance for Needy Families) decline.

Library Workers: Facts & Figures Fact Sheet 2014

June 13, 2014 Comments off

Library Workers: Facts & Figures Fact Sheet 2014
Source: AFL-CIO

Libraries and library staff provide essential services for schools, universities, and communities. Americans use libraries for free, reliable, and organized access to books, the Internet, and other sources of information and entertainment; assistance finding work; research and reference assistance; and programs for children, immigrants, and other groups with specific needs, just to name a few.

This fact sheet explores: library staff in the workforce, diversity within the professions, educational attainment of library workers, the role of women in the professions, issues of pay and pay equity, and the union difference for library staff.

Closing Economic Windows: How H-1B Visa Denials Cost U.S.-Born Tech Workers Jobs and Wages During the Great Recession

June 9, 2014 Comments off

Closing Economic Windows: How H-1B Visa Denials Cost U.S.-Born Tech Workers Jobs and Wages During the Great Recession
Source: Partnership for a New American Economy

The Partnership for a New American Economy’s new report, Closing Economic Windows: How H-1B Visa Denials Cost U.S.-Born Tech Workers Jobs and Wages During the Great Recession, shows how existing H-1B visa lottery caps disproportionately hurt American-born tech workers by slowing job and wage growth in more than 200 metropolitan areas across the United States. H-1B visa denials in 2007 and 2008 caused these areas to miss out on creating as many as 231,224 tech jobs for American-born workers in the years that followed and cost U.S.-born, college-educated workers in computer-related fields as much as $3 billion in aggregate annual earnings.

State Minimum Wages: 2014 Minimum Wage by State

June 3, 2014 Comments off

State Minimum Wages: 2014 Minimum Wage by State
Source: National Conference of State Legislatures

Summary:

  • 38 states have considered minimum wage bills during the 2014 session; 34 states are considering increases to the state minimum wage.
  • Connecticut, Delaware, Hawaii, Maryland, Michigan, Minnesota, West Virginia and D.C. have enacted increases so far in 2014.
  • As of May 28, the legislature in Vermont passed an increase but the bill is awaiting action by the Vermont governor.
  • As of June 1, 22 states and D.C. have minimum wages above the federal minimum wage.
  • 19 states, Guam, and the Virgin Islands have minimum wages the same as the federal minimum wage of $7.25.
  • 4 states, American Samoa, and Puerto Rico have minimum wages below the federal minimum wage (the federal minimum thus applies).
  • 1 state, New Hampshire, repealed their state minimum wage in 2011, but left the reference to the federal minimum wage.
  • 5 states have not established a state minimum wage.

The Class of 2014 — The Weak Economy Is Idling Too Many Young Graduates

May 29, 2014 Comments off

The Class of 2014 — The Weak Economy Is Idling Too Many Young Graduates
Source: Economic Policy Institute

The Great Recession officially ended in June 2009, nearly five years ago. However, the labor market has made agonizingly slow progress toward a full recovery, and the slack that remains continues to be devastating for workers of all ages. The U.S. labor market still has a deficit of more than 7 million jobs, and the unemployment rate has been at 6.6 percent or higher for five-and-a-half years. (In comparison, the highest unemployment rate in the early 2000s downturn was 6.3 percent, for one month in 2003.) The weak labor market has been, and continues to be, very tough on young workers: At 14.5 percent, the March 2014 unemployment rate of workers under age 25 was slightly over twice as high as the overall unemployment rate, 6.7 percent. Though the labor market is headed in the right direction, it is improving very slowly, and the job prospects for young high school and college graduates remain dim

A key finding of this paper is that there is little evidence that young adults have been able to “shelter in school” from the labor market effects of the Great Recession. Increases in college and university enrollment rates between 2007 and 2012 were no greater than before the recession began—and since 2012, college enrollment rates have dropped substantially. This means there has been a large increase in the share of young high school and college graduates who are idled—neither employed nor enrolled in school—by the weak economy. This represents an enormous loss of opportunities for this cohort that will have lasting consequences.

Women in the Labor Force: A Databook

May 28, 2014 Comments off

Women in the Labor Force: A Databook (PDF)
Source: Bureau of Labor Statistics

This report presents historical and current labor force and earnings data for women from the Current Population Survey.

Paycheck Plus: A New Antipoverty Strategy for Single Adults

May 27, 2014 Comments off

Paycheck Plus: A New Antipoverty Strategy for Single Adults
Source: MDRC

Over the past several decades, workers with college degrees have seen their wages rise substantially, in tandem with the nation’s economic growth. However, wages for less-skilled workers, specifically those without a college education, have followed a dramatically different course. Many less-educated workers have faced increasing hardship as their wages stagnated over the past 30 years and some — particularly men — have seen their earnings fall sharply. This decline in the payoff to work has reduced employment and contributed to persistently high poverty rates and growing economic inequality. The federal Earned Income Tax Credit (EITC) supplements the earnings of low-wage workers and has become one of the nation’s most effective antipoverty programs. However, because most of its benefits go to low-income workers with children, it only reaches a minority of low-wage workers. Although low-income workers without dependent children are eligible for the EITC, benefits for this group are nominal in comparison with those received by families with children.

This brief describes Paycheck Plus, a pathbreaking demonstration project testing a new EITC-like earnings supplement for low-income single adults that aims to improve their economic circumstances while promoting employment. The project recently completed its first milestone, recruiting and enrolling over 6,000 individuals, with half assigned at random to a program group eligible for the supplement and the other half assigned to a control group not eligible for the supplement. MDRC will follow both the program and control groups for several years, to assess the supplement’s effects on economic well-being, work, and other outcomes. Funded by New York City’s Center for Economic Opportunity (CEO) and the Robin Hood Foundation and managed by MDRC, the project is a direct response to the downward trend in employment, wages, and earnings among New York’s and the nation’s least-skilled workers. Paycheck Plus could serve as a national model and add to the current bipartisan discussion about supporting low-wage work, increasing the minimum wage, and expanding the EITC.

Executive Compensation at Public Colleges, 2013 Fiscal Year

May 21, 2014 Comments off

Executive Compensation at Public Colleges, 2013 Fiscal Year
Source: Chronicle of Higher Education
From related article:

The three highest-paid public-college leaders in the 
nation have something in common: They earned hundreds of thousands of dollars on their way out the door.

The size of the parting packages given to these men—two who resigned amid long-churning controversies and one 
who quit unexpectedly—demonstrates just how expensive it can be for a college to end the presidency of a well-paid chief.

E. Gordon Gee, the popular and gaffe-prone former president of Ohio State University, earned more than $6-million in 2012-13, making him the nation’s top-paid college leader for that period, a Chronicle analysis has found. Mr. Gee has maintained that he resigned of his own accord last summer, but the decision came as trustees expressed impatience and disappointment with his often-ill-considered jokes.

Mr. Gee’s 2012-13 pay dwarfs the $478,896 median compensation for public-college presidents. The Chronicle’s analysis includes 256 college leaders from 227 institutions.

The One Percent at State U

May 21, 2014 Comments off

The One Percent at State U
Source: Institute for Policy Studies

State universities have come under increasing criticism for excessive executive pay, soaring student debt, and low-wage faculty labor. In the public debate, these issues are often treated separately. Our study examines what happened to student debt and faculty labor at the 25 public universities with the highest executive pay (hereafter “the top 25”) from fall 2005 to summer 2012 (FY 2006 – FY 2012). Our findings suggest these issues are closely related and should be addressed together in the future.

Since the 2008 financial crisis, executive pay at “the top 25” has risen dramatically to far exceed pre-crisis levels. Over the same period, low-wage faculty labor and student debt at these institutions rose faster than national averages. In short, a top-heavy, “1% recovery” occurred at major state universities across the country, largely at the expense of students and faculty.

  • The student debt crisis is worse at state schools with the highest-paid presidents. The sharpest rise in student debt at the top 25 occurred when executive compensation soared the highest.
  • As students went deeper in debt, administrative spending outstripped scholarship spending by more than 2 to 1 at state schools with the highest-paid presidents.
  • As presidents’ pay at the top 25 skyrocketed after 2008, part-time adjunct faculty increased more than twice as fast as the national average at all universities.
  • At state schools with the highest-paid presidents, permanent faculty declined dramatically as a percentage of all faculty. By fall 2012, part-time and contingent faculty at the top 25 outnumbered permanent faculty for the first time.
  • Average executive pay at the top 25 rose to nearly $1 million by 2012 – increasing more than twice as fast as the national average at public research universities.
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